U.K. Loses Life Sciences Jobs as Boston Draws More Investment

Jan 22, 2014 7:01 pm ET

Jan. 23 (Bloomberg) -- The U.K. government should further support the domestic life-sciences industry by encouraging faster uptake of new treatments after the sector lost almost 4,500 jobs in the past four years, according to a trade group.

About 600 more U.K. jobs may go after announcements last year by Shire Plc and Novartis AG, according to the Association of the British Pharmaceutical Industry. By comparison, more than 1,600 life sciences jobs were added from 2009 to 2012 in Massachusetts, particularly in the Boston-Cambridge area, which attracted about $510 million in venture capital investment last year, according to MassBio, a trade association.

“The U.S. has to be our benchmark,” Stephen Whitehead, chief executive officer of the ABPI, said in an interview. “The U.K. has always been a great base of early science and discovery. We want to see more inward investment coming from the international players.”

That may happen when innovation is rewarded better through improved adoption of newly approved medicines, Whitehead said. The U.K. lags behind countries such as France and Germany by several years in uptake of new drugs, he said. The U.K.’s life science hub, concentrated in the “golden triangle” of Oxford, Cambridge and London, is still the largest outside the U.S., according to the ABPI, which represents more than 150 organizations.

Patent Box

A government analysis published yesterday of medicines recommended by the National Institute for Health and Care Excellence shows that use of several cancer drugs was lower than expected in 2012. Patients and health-care workers are also inadequately informed on availability of the latest treatments, Whitehead said.

Among major job cuts in the U.K. was Pfizer Inc.’s decision in 2011 to fire 2,000 employees at its research campus in Sandwich, the birthplace of Viagra. Since then, the U.K. has created incentives for drugmakers to increase capital investment. The so-called Patent Box program, implemented last year, allows companies to apply a lower corporate tax rate to profits from patents and encouraged GlaxoSmithKline Plc to build its first new U.K. factory in almost four decades.

Still, the U.K.’s competitiveness is hindered by a more limited capital environment compared with U.S. life science hubs such as Boston, said Otello Stampacchia, an investment adviser at venture-capital firm Omega Funds.

“In the U.K., the science is world-class,” Stampacchia said. “But in Boston, there is a compounding factor where the science meets experienced entrepreneurs and a much larger pool of venture capital investors and public investors, which usually leads to a greater number of successful outcomes.”

--Editors: Robert Valpuesta, Kristen Hallam